The Wall Street Journal is reporting that AT&T Wireless (NYSE:AWE), the second-largest wireless carrier in the U.S., plans to lay off 10% of its workforce. Outsourcing deals with companies in India and other overseas locations are in the works. What gives?

Cost cutting, earnings concerns, and an ever-changing regulatory environment are recurring issues for telecommunications companies. Yesterday, the Fool analyzedVerizon's (NYSE:VZ) 10% staff reduction. Sprint PCS (NYSE:PCS) struggles with profitability. Dave Mock reported last week on the new regulation allowing phone number portability and its impact on the cellular carriers.

Here's the real story. To accelerate the process of generating cash, AT&T Wireless is said to be considering outsourcing (a simple word meaning: "Let's get the job done more cheaply elsewhere"). It may be a winning strategy, but price cutting and special promotions are common in the wireless business. Today's savings through cost cutting may be given away in tomorrow's competitive pricing. Overall, the company's future is still not clear.

AT&T Wireless is hardly a value stock. With 2.7 billion shares outstanding and a market capitalization of $18 billion, the company's guidance of 8% revenue growth is hardly reassuring for a stock selling for 46 times earnings. Add in $10.6 billion in long-term debt, and there's a lot of risk at today's prices.

AT&T Wireless is one of the most widely held stocks by U.S. investors. It has taken shareholders on a wild rollercoaster ride since hitting an all-time high of $29.56 a month after its spin-off from AT&T (NYSE:T) in 2000. The stock's current price of $6.65 looks great only when compared to the all-time low of $3.15 hit in October 2002. Year-to-date the stock is up 17%.

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W.D. Crotty can be reached at wdcrotty@fool.com.